The Planning Commission has asked Indian Railways to prepare a new funding plan for the development of dedicated freight corridors in India as the current plan does not take into account cost escalation  The ambitious dedicated freight corridor (DFC) project conceptualised to facilitate movement of goods and traffic needs a new funding plan as the current plan does not take into account cost escalation, states the Planning Commission. According to the commission, by the time the project is complete (2016), the cost for the same can goup to Rs 1 lakh crore. According to estimation by RITES, in January 2007, the construction cost of these two corridors stood at Rs 28,000 crore, which was revised to Rs 37,000 crore in October 2007 in a report submitted to the Ministry of Railways by Japan International Cooperation Agency. Now it is estimated that by 2016, the cost of the project may shoot up to Rs 60,000 crore.
An important project
In this context, Ms Madhubala, proprietor of Duropack, a mid-sized logistics firm in New Delhi, says, “Well, one of the options of funding the project can be an increase in passenger fare, which has not been hiked for quite some time now. Considering the importance of the project, this can be an effective option to meet the escalating costs.”
For construction of the western corridor—running from Navi Mumbai port to Tughlakhabad—the Government of Japan will provide a loan that would meet about 67% of the construction cost, whereas for the eastern corridor—running from Ludhiana to Dankuni—funds would flow from agencies such as World Bank and Asian Development Bank.
According to Ranjan Paul, finance head of Rolex Logistics, a mid-sized logistics firm in Bengaluru, “With rising cost of raw materials, it is evident that the cost of the DFC project will rise in the coming years. One of the ways to raise funds for the project is by improving services such as tatkal system of reservation, online ticketing system, catering system etc, which will boost the overall revenues of Indian Railways.”
Mr Paul also added that with economic activities gaining momentum in the country, logistics activities too will get a tremendous fillip in the coming months, which will put pressure on road transportation. To overcome the pressure, it is essential to increase freight movement via railways and for this it is essential to develop the DFC at the latest.
Auto SCM 2010 too focusing on DFC expenditure
DFC aims to set up separate tracks for running of goods and passenger trains and in a seminar that was held last month, Auto SCM 2010, Logistics as a Key Enabler to make India a Global Hub (July 14-15) hosted by the Confederation of Indian Industry, experts had pointed out that the Indian Railways must spend significantly towards the development of DFC.
Currently, passenger and goods trains share the same track because of which sometimes goods trains have to be halted to give space to passenger trains and sometimes it even leads to accidents resulting in loss of revenues for railways as well as logistics firms. DFC will use world-class technology that will allow longer and heavier trains to ply, thereby resulting in movement of greater amount of cargo and goods.
Arup Choudhury |
